Health CareNews & Opinion

Gov. Cooper Aims to Relieve Medical Debt in North Carolina

New action could have $4-billion impact

Gov. Cooper sits at a desk outside of the governor's mansion at a desk signing a bill while a group of smiling people surround him.
Gov. Roy Cooper signs Medicaid expansion into law in March 2023. (Photo courtesy of N.C. Rep. John Autry)

Gov. Roy Cooper and the NC Department of Health and Human Services (NC DHHS) announced new actions on Monday that they hope will relieve residents of $4 billion in medical debt through the leveraging of state Medicaid funding. 

Pending approval by the US Centers for Medicare and Medicaid Services (USCMMS) for extra Medicaid funding, the action could alleviate debt for approximately 2 million low- and middle-income North Carolinians beginning in 2025 and 2026. 

Research findings published in June 2022 by KFF investigators in collaboration with NPR discovered that nearly 41% of adults in the US face some medical debt. This program would alleviate much of that debt for North Carolinians who participate.

“Large medical bills from sickness or injury can cripple the finances of North Carolinians, particularly those who are already struggling,” Cooper stated in a press release on Monday. “Freeing people from medical debt can be life-changing for families, as well as boost the overall economic health of North Carolina.”

The governor’s action will encourage hospitals to relieve debt and decrease patient costs through extra Medicaid funding. Hospitals must meet set requirements to be deemed eligible for the funding. Requirements include setting policies or measures to relieve existing patient medical debts and prevent future debt for low- and middle-income North Carolinians. 

Specific policies that would have to be implemented by hospitals to meet requirements to receive funding include: 

  • Relieving all medical debt deemed uncollectible dating back to Jan. 1, 2014. This only applies to North Carolinians not currently enrolled in Medicaid with incomes greater than or equal to 350% of the federal poverty level (FPL) or if their total debt exceeds 5% of their annual income.    
  • Relieving all medical debt dating back to Jan. 1, 2014, for North Carolinians who are currently enrolled in Medicaid.    
  • Providing reductions on medical bills between 50-100% for patients with incomes at or below 300% of the FPL. The discount amount would vary depending on the patient’s income.
  • Automatically enrolling people into financial assistance by implementing a policy for presumptively determining those eligible for the assistance. This means patients would not need to take action to be included in debt relief. Patients can opt out of the program and not be affected.
  • Interest rates on medical debts will be capped at 3% and medical debt will not be reported to credit agencies.

North Carolina hospitals that do not implement these policies will continue to see the standard amount of funding from the state, but no increase. 

While NCDHHS awaits approval from USCMMS, it will work with eligible hospitals to prepare for implementing the new policy. 

NCDHHS will provide this medical relief in collaboration with Undue Medical Debt, formerly RIP Medical Debt, a national nonprofit founded in 2014 that works to relieve medical debt nationwide. 

“North Carolinians are carrying the emotional and financial burden of debt and often delay necessary care because of past bills,” stated NC DHHS Secretary Kody H. Kinsley. “Medicaid Expansion gave 600,000 people access to care. Relieving medical debt will get individuals and families into care sooner, bring down the cost of care and give them a fresh start on a healthy and productive life.”

Read more: A Look at Medicaid Numbers After December Expansion in North Carolina

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